Is Curalate Philly’s Most Successful Start Up?

Apu Gupta’s company could be valued at a billion dollars — and that’s exactly what Philly’s tech scene needs.

Photograph by Gene Smirnov

Photograph by Gene Smirnov

PART I
In which Apu Gupta models a bra on his birthday

Consider the photo Apu Gupta snapped of himself one day last summer on his iPhone 6. It happened to be his 41st birthday, which made him a wizened elder in the marketing tech company called Curalate that he co-founded less than five years ago and has guided, as CEO, through quick revenue growth and expansion.

Though the venture has yet to turn a profit, its growth potential has made Curalate catnip for venture capitalists. With nearly $28 million in new VC funding earlier this year, Gupta, a Wharton MBA, and his co-founder, a Harvard-educated computer scientist named Nick Shiftan, went on a hiring binge, stocking the young company (why its name is a portmanteau of curate and correlate will be obvious soon enough) with a bevy of millennials — not just computer coders, but workers with such buzzy titles as Brand Strategist and Client Success Manager. “The only objective you have as a start-up is to figure out how to grow faster,” Gupta tells me. “Every day you ask yourself, how can I make this thing go faster?”

The company has already grown beyond Philadelphia; there are satellite offices in Seattle and New York. But the headquarters of Curalate — which Gupta at his most expansive claims will change the way people discover and buy things on the Internet — occupies the fifth floor of a former storage depot on the east bank of the Schuylkill River. It’s no coincidence it resides in a tax-advantaged zone designed to encourage companies creating new tech jobs, which earned Curalate a $100,000 tax credit in 2015.

Compared to the lavish perk palaces of Silicon Valley, Curalate’s headquarters seem rather spartan, though there is the requisite kitchen, with good coffee and a refrigerator stocked with free snacks. Except for a ceramic leopard near the front door, the only decoration in the office is an emblazoned wall that often serves as a backdrop for company group photos, which tend to feature young people wearing big smiles and tight Curalate t-shirts. It reads: EVERYDAY I’M HUSTLIN’.

As CEO of a fast-growing enterprise that’s developing game-changing software products aimed at exploiting the millennial zeitgeist, Gupta treads a thin line between seeming serious and visionary while at the same time encouraging a regular Friday happy hour, with video conferencing between offices. (“Seattle really gets a hall pass on Friday,” he says.) Of course, he doesn’t have his own office. He was sitting at his computer, squeezed into a corner of the 10,000-square-foot space, on July 26th when he heard drumbeats. Soon, tropical drinks were being passed around. And co-founder Shiftan started the birthday celebration by presenting Gupta with a lei and a faux grass hula skirt and a seashell bra.

Now, if you’re like me and your first thought when you see that picture of Gupta in the seashell bra is, “How fast can I buy one for myself?,” he and his partner might really be onto something big. What they claim to be doing at Curalate is nothing less than “making visual content intelligent.”

Using image recognition software and the increasingly affordable and accessible trove of Big Data, Curalate can troll through the millions of images posted on the Web every day and hone in on the particular products they reveal. “If a picture is worth a thousand words,” the industry-insider site TechCrunch has explained, “Curalate makes brands literate.” The actual meaning of that sentence may be rather opaque on further analysis, but it appears all over Curalate’s website and email correspondence.

The promise is this: See something you like in an Instagram photo on your phone, and with a minimum number of swipes and clicks, buy it. Curalate is offering retailers and consumer brands a crack in the door to where young consumers really reside: on their phones, devouring social media. The company says that 850 top brands and retailers are now paying annual subscription fees to use one or more of its software products. Clients range from Urban Outfitters to Nordstrom to Crate & Barrel. There’s also a new partnership with Google. The so-called SaaS model — Software as a Service — has been popular with investors because of the recurring revenue built in. And it’s what the tech world calls “scalable,” meaning once the products are developed, they’ll work for as many clients as are willing to pay.

All of these factors could make Curalate one of Philadelphia’s very rare magical entities in the new mythology of tech: a unicorn, a company that goes from roughly zero to a $1 billion valuation. Because Curalate is still a private company, Gupta is under no obligation to reveal its revenue or market valuation. And he won’t; I asked. More than once. In any case, the company has raised $40 million in outside financing, making it a bellwether of Philly’s stop-and-start, handwringing progress toward becoming a city with a viable technology sector.

PART II

In which 1,000 tech nerds gather on a sweltering evening

“The unicorn cliché,” says Christopher Wink. “The under-10-year move from zero to a billion. That’s the obsession. That’s not the salvation. It’s nice to have. But I want a thousand 100-person companies.”

Wink, a tall, self-assured and voluble 30-year-old, is co-founder of Technical.ly, which now operates in five cities. His website is dedicated to covering the start-up scene and the disruptor sector. Part probing, part boosterish, Wink likes to describe himself as the proprietor of a community newspaper for the community that happens to be fluent in Python and really, really wants to believe in unicorns.

I’d dropped by his office, in a shared working space in the old Curtis Publishing building — how’s that for irony? — and we were headed to Technical.ly’s yearly techie party on Headhouse Square, called a Super Meetup.

Wink has spent seven years hearing the same lament over and over: Why can’t Philadelphia be more like Silicon Valley, where the unicorns are so plentiful that they practically block traffic on Sand Hill Road, a main thoroughfare of Palo Alto, capital of venture capital? Blame tends to be spread around, from clueless government policies to timid and shortsighted local investors.

Wink thinks it’s simply time to change the conversation: Nowhere else is going to be Silicon Valley. He was willing to make one prediction: “It’s very easy to say that Curalate generally and Apu specifically are on a short bench of bets worth making to be Philadelphia’s first billion-dollar tech company of this era.”

One of the most prominent people to have made a bet on Apu Gupta is Josh Kopelman, a sort of local legend well known and respected in the wider world. Over a 25-year career, Kopelman built several tech companies — one of which, Half.com, sold to eBay for $350 million — and then co-founded the venture fund First Round Capital.

“When people say, ‘What does Philadelphia need to be a more successful ecosystem?,’ I don’t necessarily think it’s more capital,” says Kopelman. “Even though that would clearly help. I don’t think the answer is more government initiatives, even though that could help. There’s this great entry-level talent at universities here.

“For me, what creates entrepreneurial ecosystems are successful companies. Because what you want is to be able to find that pool of experienced talent — specialists, not just generalists — in any city. It’s not an accident that Tesla, YouTube, Yammer, which sold to Microsoft for a billion dollars, SpaceX, Yelp — all of them over a billion dollars — were started by alumni from PayPal.” The tech world has dubbed those serial entrepreneurs the PayPal Mafia.“Big trees drop pine cones,” Kopelman adds. “That’s what you’ve seen in Silicon Valley. My hope for Philadelphia is that you see more companies like Curalate. Because if Curalate continues to succeed, you’re going to see the next generation of founders, of seed-stage investors, board members, employees — specialists who have real skill in technology — go on to create the next generation of companies.”

On paper, Philadelphia seems to have all the elements in place. There are tech incubators. Shared workspaces are sprouting. Seed funds are springing up (though Kopelman still sees a shortage in that area), a few of them buttressed by government money. Studies show that the long-term problem of brain drain — graduates of Philadelphia’s many universities taking their diplomas and going elsewhere — has reversed, and lately there have been substantial net gains in educated young people. Christopher Wink can point to the city’s annual Tech Week; 20,000 people showed up for 150 separate events in 2016.

At dusk on my evening with Wink, he and I were sipping beer in the historic square for the Super Meetup. It was hot as hell and tropically humid, but the place was swarming with people, though their talent levels remained obscure. Comcast and Bloomberg had recruiting tables set up. The free pizza booth was more popular. “We can get 1,000 people out on a sizzling night,” Wink said proudly. “You can’t make up those numbers.”

As the co-founder of the odds-on favorite in Philly’s unicorn sweepstakes, Apu Gupta likely would have generated some buzz by showing up at the Super Meetup. But he stayed away. He has tried at times to make himself into a cheerleader for the Philly tech scene, writing guest blog posts for the Wall Street Journal and Philly.com touting the city and its potential to be a player in tomorrow’s digital world. When we met for dinner later that evening, Gupta told me, “I don’t go to parties. I don’t like strangers.”

PART III

In which Apu Gupta answers the “Why Philly?” question

In that guest post he wrote for a tech blog in the Wall Street Journal, Gupta began: “As Californians who’ve traded two seasons for four, my co-founder and I are often greeted with puzzled expressions when people learn that our successful tech start-up, Curalate, is located in Philadelphia. Without fail, those raised eyebrows give way to the question we know is coming, ‘Why Philly?’”

I asked him that, too.

“In the beginning, investors told us, ‘Why don’t you move to the West Coast?’ We didn’t because I needed to be here.”

His wife had a job in her chosen career here, and for a while, he really didn’t.

Gupta first arrived in Philadelphia in 2004, to get his MBA at Wharton. He’d grown up in Silicon Valley, the only child of two PhDs who’d emigrated from India in 1975 and ended up working at a NASA research lab in Mountain View, California, which is where William Shockley, who’d been working for Bell Labs in New Jersey, set up the first semiconductor company, partly because his elderly mother lived nearby.

Though Gupta claims to be “the only Indian dude in the world who isn’t good at math,” his father convinced him to attend the University of Texas for a joint business-engineering degree. (He failed calculus, aced marketing.) He left Austin and headed back to San Francisco to work at a tech start-up, WebEx Communications, that developed early conferencing software.

“This was back when we were still dialing up to the Internet,” Gupta says. “The idea that you could share the screen on your machine with me halfway across the world, online — DUDE, that was mind-blowing!” Not incredible enough, though, to make him happy. Gupta says he had “this quarter-life crisis” and quit his job.

“My parents are very well educated, but they’re immigrants, and they have an immigrant mentality,” he says. “I’m very privileged in many ways to do certain things and take risks they never could have. Had they failed, there was no safety net. My dad worked in a Pizza Hut when he got here, and my mom worked in a lingerie factory. These are people with PhDs from the MIT of India. And now I’m going to quit this pretty decent job I have here and travel the world for nine months. And they were like, WHAT THE FUCK! Seriously? Who the fuck are you?”

(Aside from the occasional selfie with seashell bra, Gupta for the most part gives off the air of a serious, well-mannered Indian dude. In fact, he can be loud and profane and is prone to pottymouth. He has congratulated himself on Twitter for not dropping any f-bombs during a live radio interview. An official Curalate employee brochure is titled “I work because I love this shit.”)

After his nine months of traveling, Gupta returned to San Francisco and got a consulting job with Arthur Andersen, which soon was caught up in the Enron scandal and dissolved. Unemployed in the midst of the dot.com bust, he decided to get an MBA. “Business school was not even a backup plan,” he says. “It was really what I would do if everything else failed.”

He landed at his last choice, Wharton. There, Gupta became friendly with an Indian native with an undergraduate medical degree who was getting an MBA in health-care management. They spotted a business opportunity to start a pharmacy chain in India. Around this time, a friend introduced Gupta to Jasmine Patel, who was getting her PhD in biomechanics at Case Western in Ohio. They got engaged and promptly left for India.

During the nearly three years Gupta worked constantly to open 650 pharmacies in the region around Hyderabad, Patel never found meaningful work there. Gupta didn’t become enamored of his parents’ homeland, which he’d only visited occasionally as a child. The couple decided to move back to the States. Patel landed a job in the Philadelphia office of Exponent, a national engineering and scientific consulting company. “She’d followed me,” Gupta says. “It was my turn to follow her.” They moved into a rental on Fitler Square in 2009, in the midst of the Great Recession.

“I couldn’t get a job,” Gupta remembers. “I did all kinds of random stuff. I thought for a little while that I was going to be a real estate guy. Maybe I’ll buy and sell properties. I go through these flights of fancy. I wanted to be an astronaut once. Then I got glasses, so that’s not going to happen. I wanted to be a hip-hop deejay for a while. That would have been cool — but I wasn’t cool enough. I wanted to be so many things. And I’m not talking about when I was, like, five. At an age when I should have known better.

“I realized I wanted to be back in tech. I get tech, like, intrinsically. I’d grown up around it. Even though I’m not a software engineer, I get it. I see opportunities in tech that I don’t in most other industries. I really don’t mean that to brag. I’m a big dork at the end of the day. I just really, really love technology and the potential it holds.”

He started networking with folks in the Wharton community, he says: “And that’s when I was introduced to Nick.”

Like any tech company worth its inflated market valuation, Curalate has an origin story. It’s not exactly the tech-world classic of guys building black boxes in a garage. For Curalate, it was lunch at a cafe in Palo Alto.

“We effectively did the co-founder equivalent of blind dating,” says Shiftan, who moved to Seattle after Harvard and worked for six years in mobile development with Microsoft. “What came out of that lunch is that we both had very similar values in terms of the type of company we were interested in starting.”

The business idea they came up with was Storably. Think Airbnb, only for the unused space in your house that you could let a stranger rent. “Airbnb had just raised $100 million at a billion-dollar valuation,” Gupta says. “When Airbnb was originally trying to come up, most people in the Valley thought it was an insane idea. They were like, ‘Let me get this straight: I’m going to let a stranger sleep in my house? You’re on crack.’ Nobody wanted to back Airbnb.” Now that Airbnb was a bona fide unicorn, a number of venture capitalists were afflicted with a serious case of FOMO. Storably, Gupta admits, “was a derivative idea — 100 percent, without shame. It was opportunistic.”

The opportunity came quickly. Using connections from his early days, Gupta got a meeting to present his pitch deck on fabled Sand Hill Road in Palo Alto. For a kid raised in Silicon Valley, “It was like a fucking dream come true,” Gupta says, trying to come up with an analogy.

Like playing Carnegie Hall? I offer. “Exactly,” he says.

“Not even 20 minutes later, before we could get the car out of the driveway, they called us and said, ‘We’re going to give you a term sheet.’ Which means invest. Holy shit! You know? It was such an amazing moment.” Then a few other VCs jumped on board, including Kopelman’s First Round Capital. Storably was planted with about $750,000 in seed money.

About a week after Shiftan had moved to Philadelphia, Gupta came to his desk and said, “I don’t think the company is going to work.” It turned out very few people were interested in renting unused storage space around their homes to strangers.

“You just picked up everything and moved from Seattle and six days later your co-founder tells you it’s not going to work,” Shiftan recalls. “It was terribly exciting.”

From left: Curalate co-founders Shiftan and Gupta and marketing director Lowry in their Center City office | Photograph by Gene Smirnov

From left: Curalate co-founders Shiftan and Gupta and marketing director Lowry in their Center City office | Photograph by Gene Smirnov

This led to the next chapter in what is quickly becoming an archetypal tech start-up narrative: The Pivot. Gupta went back to his investors with the bad news. “I was afraid I was going to get yelled at,” he remembers. “I told Nick to be prepared.”

“Apu was very transparent,” Kopelman recalls. “And very self-confident. He knew we bet on him and we bet on a concept, and if the concept doesn’t pay out, it’s not his job to just light all the rest of the money on fire while he’s trying. He came back to us and said, ‘Hey, this isn’t working. Do you want your money back?’” The investors on the board said to keep the money — and come up with another business idea.

Gupta, Shiftan and their one employee — Brendan Lowry, a recent Temple grad with a penchant for social media — spent a month brainstorming nearly 70 ideas. One was for a prepackaged dinner-prep service they called Ethnically. (In this case, think Blue Apron.) Another was a cocktail-hour matchmaking service they called DrinkedIn. “It goes to show you that ideas are worthless,” Gupta told me. “Anybody can generate an idea. It ultimately comes down to the execution of those ideas.” Though it has long been fashionable for tech companies to cultivate an image of pure innovative fervor (many actually title someone Chief Evangelist), the spread of VC money has created a more mercenary reality. “I didn’t have any emotional investment in Storably,” Gupta admits. How fervent can you be about 70 business ideas?

At some point, they started thinking about the new social app called Pinterest. “In January 2012, everybody was talking about Pinterest,” Shiftan remembers. “They had gone from a million users to five million in a month.” (Actually, by February 2012, they’d already amassed 10.4 million users.) Gupta and Shiftan perceived that FOMO wasn’t limited to VCs. “Every brand in the world thought they had been late on Facebook,” Shiftan says, “and late on Twitter. They didn’t want to be late on Pinterest.”

The thing that made Pinterest different from Facebook and Twitter — at least in those bygone days of five years ago — was that Pinterest was all about images. So if brands were going to jump onto Pinterest, they needed a new way to measure their success. “There were no analytics at the time,” Gupta says. “So we said, let’s build a Pinterest analytics tool. It was a very small idea in the beginning.”

“As we started to build it, Nick realized that this wasn’t about Pinterest. It’s about pictures. Consumers were shifting to a world where they would get information visually instead of by text. And that brought up some really profound questions. In a world that’s dominated by text-based search, what do you do when people stop using text?”

If the so-called “sharing economy” inspired Gupta and Shiftan’s failed idea for Storably, the over-sharing economy created by social media is giving them a fertile field to plow with Curalate. The company now offers a suite of products. Like2Buy makes Instagram a shopping site. Fanreel creates a shop-able gallery on a brand’s website, using images from the brand or — even better — its enthusiastic users. The company is working on a product that will identify less familiar but perhaps more effective social media “influencers” that brands can procure for their endorsements. “Can’t afford a Kardashian?” asks a Curalate blog post promoting the idea. “Use a Micro-Influencer.”

PART IV

In which Apu Gupta gets on a train

One morning late this summer, I meet Apu Gupta in 30th Street Station, and we catch a train to New York, where there are now more Curalate employees than in Philly. It isn’t very early, but he looks sleep-deprived. He and his wife had arranged for a surrogate to carry their first child. Soon after the surrogate was impregnated, Jasmine Patel became pregnant on her own, and now the couple is raising two infants with a five-month age difference. “The way we did it isn’t recommended,” Gupta tells me. “Twins would have been easier. It takes a toll. I literally have time in my life for two things.”

After being shamed off the Amtrak quiet car for talking too much, Gupta and I sit in the cafe car, and he talks about learning on the job to be a CEO. “It’s isolating,” he says. “There isn’t a playbook. Eventually you start to realize that it’s all about people on a day-to-day basis. My natural instinct skews toward impatience. I have to constantly force myself to become a more patient person.” Gupta has a quick wit and a sharp mind, but also little tolerance. On several occasions, he cuts me off in the midst of explaining something with a simple“Got it.”

The train is crossing the Delaware River, and I see the TRENTON MAKES THE WORLD TAKES sign slide through the window behind Gupta, who is making software to track data that identifies images stored in the Cloud. Curalate has grown its Walnut Street office to 70 people and is still hiring; Philly will take it.

At that moment, Gupta is talking about money and when Curalate might reach what he terms “cash-flow-positive” status, which might or might not preclude another round with the venture capital folks.

“There’s a lot of sexiness to raising money,” he says, “so people kind of view a fund-raise as a proxy of what success looks like. The problem is, as you raise money, you’re selling off the equity of your business. If it doesn’t accelerate growth, you just diluted your company for no reason at all.”

Josh Kopelman — who would be happy to dilute Gupta’s ownership with more venture capital — told me, “I think that Apu has built an amazing business. He’s a low-key guy. Unlike a lot of entrepreneurs, he leads with substance, and now he’s trying to get some attention for this amazing company he’s built. Curalate is at the stage where they’re playing and competing at a national level. And so far, they’re winning.”

That may get Gupta more attention than he really wants, especially in Philadelphia, where a big tech success seems long overdue.

Growing up in Silicon Valley at the dawn of the personal-computer era, Apu Gupta came to believe that “companies really did change the world.” He’s too self-aware to say that about Curalate. He’s a fan of the very funny TV series Silicon Valley, which has taken aim at the high self-regard and hubris of tech entrepreneurs. Gupta might mention the possibility of changing the world, but for now, Curalate is content to help companies sell us more stuff to fill the one we have. It could be a very lucrative idea, and it could help make Philly’s fragile tech ecosystem a little more like its thriving West Coast rival.

“I tell our team all the time,” Gupta says, “this is ours to lose. I see no reason why there can’t be a Curalate Mafia.”

Published as “Does Apu Gupta Believe in Unicorns” in the November 2016 issue of Philadelphia magazine.

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